Undergraduate Journal of Global Citizenship
Volume 1 | Issue 2
Article 2
5-31-2012
The Impact of the Fair Trade Market on Coffee
Farmers in Costa Rica
Kerri L. Loveless
SUNY Cortland
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Recommended Citation
Loveless, Kerri L. (2012) "The Impact of the Fair Trade Market on Coffee Farmers in Costa Rica," Undergraduate Journal of Global
Citizenship: Vol. 1: Iss. 2, Article 2.
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Loveless: Fair Trade Market in Costa Rica
The exponential growth of the human race over the past few centuries has
caused major alterations to the natural environment. As these radical
environmental changes result in drastic climate changes, it is imperative that
individuals become more aware of the effects that their actions have on the earth.
The increased demand for natural resources as human expansion proceeds has
resulted in the exploitation and overdevelopment of once fertile areas. Farmland
around the globe has been stripped of nutrients due to overuse. Costa Rica, a
primarily agrarian country, uses its rich soil to grow and export coffee. Coffee
farming has helped provide Costa Rica with a stable economy, but coffee farmers
find it increasingly difficult to succeed in the global market with ever fluctuating
market prices fueled by corporate monopolies and rampant commodity
speculation. As a result, some small-scale farmers have turned to organic and fair
trade markets where their products yield higher prices. Fair trade organizations
give coffee farmers a chance to participate in the global economy in a more just
way and to be global citizens. Fair trade raises consumer awareness, to the plights
of coffee farmers in coffee producing countries. Fair trade organizations fight the
mainstream ideals of global capitalism to help farmers and consumers to unite
through the common thread of global citizenship.
Theoretical Framework
The capitalistic market creates the unfair selling prices that coffee farmers
see today. The proof is in the fact that a fair trade market has emerged, which
strives to offer fair prices to its growers. Why has the conventional market not
met the needs of the farmers? The theories that Karl Marx created to explain the
rise and eventual fall of capitalism are helpful in understanding the reality of the
coffee market. Individuals pursue their interests though the market which do not
coincide with communal interest. Either of these interests do not coincide with the
interest that coffee corporations have, so each interest group is at odds with one
another and this scene isplayed out on the stage that is the capitalist market (Marx
and Engels 2004: 79). Capitalism inherently creates conflicting interests. Trade,
simply the exchange of goods, dominates the entire world. In today’s world there
is an extreme division of labor, without which the modern world could not exist.
Capitalism encourages trade, trade utilizes the principle of a division of labor in
order to function most efficiently. For instance coffee growers will not have time
to make their own clothes if they are trying to maximize the yield of the land.
When farmers cannot produce everything that they need they will have to trade to
obtain these necessities. This process in and of itself destroys freedom and creates
alienation: “…[alienation] refers to the separation of the individual from either the
preconditions or the products of labor…” (Marx and Engels 2004:78).
Throughout history, people have grown more and more enslaved by the
inexplicable power of alienation, as the importance of a global market has
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increased (Marx and Engels 2004:79). Marx believes that the only solution to the
problem is communism. However, perhaps livable wages from fair trade is a good
way to improve the lives of millions of individuals.
The world market is not providing living wages for its producers, and as a
result fair trade organizations have arisen to provide farmers with wages that are
more fair. Fair trade organizations provide an income that is protected from
market inconsistencies because the organizations provide a minimum price at
which they buy fair trade certified coffee that reflects the cost of production.
“[Fair Trade is] theoretically, premium prices that socially and environmentally
conscious consumers pay to help small and disadvantaged producers earn higher
and more reliable incomes from commodity production” (Sick 2008:194). With
fair trade, farmers hope to improve their position within the market and are often
successful. However, despite its successes, fair trade is lacking in many respects.
The cooperation of producers and consumers is essential in today’s
economy, and division of labor allows the current economic system to function.
At the same time, it creates interdependence and room for exploitation. Fair trade
works to correct the abuses that the capitalist system places on the farmers but fair
trade should not be touted as the solution to free market capitalism. Despite the
benefits of fair trade organizations, these organizations face many obstacles
before they can move beyond the status of a minor player in the global market.
History
Coffee began its import life as a colonial cash crop. Prior to the age of
imperialism, the Arabs had a monopoly over coffee and kept it a guarded secret.
In 1616 the Dutch smuggled coffee seeds out of a port in Mocha and established
plantations in their colonies in Java. The drink quickly became a delicacy in
coffeehouses in Europe and trickled down to the middle classes becoming a
widely consumed beverage. Coffee was brought to the Americas by French
colonists, and was first grown in Martinique in 1719. It was grown and harvested
in the Americas using slave labor (Jaffee 2007:39). In the 18th century coffee
quickly went from being a crop grown with various other products to a
monoculture, or cash crop, creating dependence (Jaffee 2007:41).
After independence from Spain in 1821 the Costa Rican government
offered land plots to people that wanted to farm, and they encouraged coffee
farming as it was a stable family business that generated wealth and a livelihood
for the Costa Rican people. In 1969 coffee provided 10% of Costa Rican national
income and 50% of its exports. Originally coffee was only produced on the
highest lands of the central region but as time went on crops expanded to the
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lower lands on the Atlantic side of the country (Rowe 1963:87). Today two thirds
of the farms in Costa Rica are still owned and operated by families. Coffee farms
are passed down through generations. Costa Rica grew as a rural democracy of
small landowners and has, for the most part, remained as such (Valenti 1999;
Rowe 1963:91). Consequently, cultural practices and traditions have been shaped
by small-scale family farming.
From the 1960’s to the 1980’s coffee sales were regulated by the
International Coffee Agreement which set quotas, controlled prices and
maintained prices according to different grades of coffee. The world price for
coffee set by commodity traders on the New York Coffee, Sugar and Cocoa
Exchange fluctuated at this time between $1.00 and $1.50 per pound. At this time
the price was relatively high and stable so more farmers were converting over to
coffee production. However, on July 4, 1989 the International Coffee Agreement
collapsed because of changing consumer preferences, a surplus of coffee from
non International Coffee Agreement members, and the government of the United
States. The U.S. government shifted its foreign policy in the 1980’s from a focus
on South America to its nearer neighbors Mexico and Central America. (Jaffee
2007:42). The collapse of the International Coffee Agreement as the regulating
body, exposed all farmers to a free-market. Prices fell to 49 cents per pound in
1992, a price that did not even cover the cost of production for small-scale
producers, who grew over 2/3’s of the world’s coffee. Farmers suffered after
being exposed to the volatile free market. There was a rebound in the market
between 1994 and 1997 but the price of coffee again fell below the cost of
production in 1999. Coffee prices hit an all time low in December of 2001
dropping to 41 cents per pound. Often times farmers received even less for their
coffee because of the supply chain, all the intermediary hands that the product
passed through on its way to the consumers (Jaffee 2007:43). The shockingly low
prices continued until 2004, when the market rebounded itself slightly because of
frosts in Brazil. In July 2006 prices were at 95 cents per pound. When factoring in
inflation these prices are half of their pre-1989 value (Jaffee 2007:44).
Current Trends
In times of crisis the only real winners are large multinational corporations
that buy dried beans and roast the coffee beans themselves. Five coffee
corporations control 69% of the world’s roasted and instant coffee and during
these times of crises for the farmers, coffee corporations still reported record
profits. In 2001 Starbucks reported a 41% jump in first quarter profits. Nestlé, the
world’s leading coffee corporation had a 20% increase in 2001 followed by a 13%
increase in 2003. For the consumer, prices have continued to rise despite the
wholesale drop in coffee prices. One estimate said that coffee corporations gained
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an additional eight billion dollarsduring the crisis (Jaffee 2007:49,50). This
corporate gain has led to an increase in poverty.
Coffee is the second most popular drink in the world, only to water. In
New York on the Stock Exchange, far from the farms where coffee is being
monitored, and grown and ripened for nine months, like a pregnant woman, the
price of coffee is fixed. Coffee is the most volatile freely traded commodity in the
world. It is the second most important raw material on the global market today
(oil is first) (Valenti 1999). The four corporate giants are Procter & Gamble Co.,
Philip Morris Cos.'s, Kraft Foods Inc., Sara Lee Corp. and Nestle SA of
Switzerland. They control about 40% of the world's coffee. They buy it in bulk
and then roast, grind and blend it into brands such as Kraft's Maxwell House and
P&G's Folgers (Fritsch 2002). Domination of the market by corporations has
created a niche market; a place for fair trade institutions. In turn, fair trade
institutions have become advocates for the growers, raising awareness on such
issues as sustainable growing practices and farmers’ rights.
To provide relief from these controlling corporations the fair trade
organizations movement has emerged through a social movement that attempts to
raise consumer awareness while simultaneously promoting improved economic,
social, and environmental conditions for producers. These goals are realized by
creating an alternative market which cuts out exporters, importers and brokers so
that more money can go to producers. This market helps to alleviate uncertainties
for small-scale producers by setting a minimum price that provides a living
wagefor workers and producers. A living wage is a salary that covers the farmer’s
operation or farming expenses and provides enough money for the farmer and
his/her family to buy food and pay the bills(Jaffee 2007:37). Coffee is a cash crop
which farmers rely on to make a living, so no matter the market prices, they must
trade and sell it. (Jaffee 2007:37). Farmers who are fair trade certified receive a
set price from the fair trade organizations that they sell their products to. The
majority of fair trade coffee is certified organic, meaning that farmers attain an
even higher price for their crop (Sick 2008:196,197; Jaffee 2007:1). In 2003
Vandana Shiva described fair trade by saying “Fair trade is…the practice of what
trade should really look like if it has to serve the earth, protect farmers, protect
our biodiversity, and protect our cultural diversity” (Jaffee 2007:133). Fair trade
has emerged as a solution to global corporate dominance.
Fair trade organizations are important because they provide small-scale
farmers with the tools that they need to be more competitive. Small-scale farmers
gain organizational skills, knowledge and connections through their participation
in local cooperatives. Cooperatives are organizations of farmers who come
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together with a common interest to gain economic benefits from the partnership.
They are an important part of the fair trade system, provide small producers with
a way to gain access to markets. Cooperatives are democratic organizations that
incorporate workers who have been marginalized, such as women, with equal
voting power, and collective ownership no matter the size of their plot of land.
Perhaps the greatest contribution of fair trade has been its ability to bring social
concerns to the world’s attention while simultaneously creating a niche for smallscale coffee farmers in the global economy (Sick 2008:197,198).
Fair trade is a growing trend among consumers. There has been a 12
percent growth rate of fair trade sales from 2008 to 2009. In 2009, 73,781 metric
tons of coffee were sold through Fair Trade International, a fair trade organization
based in Germany (“FairtradeLabelling”). Douglas Murray examined fair trade
cooperatives in Central America and Mexico and found “revenues for fair-trade
coffee to be twice the street price for conventional coffee, even after deductions
were made for cooperative management and other expenses” (Jaffee 2007:95).
Fair trade is better for the farmers because it provides them with higher wages for
their crops.
Fair trade can be extremely beneficial but it is also seriously lacking in
some aspects. There are four major problems with fair trade, supply and demand,
price fluctuations, production costs, and certification. It is estimated that fair trade
only accounts for about one percent of Costa Rica’s overall coffee production
(Sick 2008:198). Fair trade markets are still relatively small and production
sometimes exceeds demand, forcing farmers who are certified fair trade to sell to
conventional buyers for a lower price. Fair trade prices are not always much
higher than conventional market prices. Fair trade functions because of is covert
exclusivity, only farmers who can obtain fair trade certifications are able to sell to
fair trade buyers but one can understand the fundamental flaws of fair trade when
the supply that the farmers are producing is exceeding the market demand (Sick
2008:200).
Fair trade organizations promise to buy coffee beans from farmers at a
price that is above the average world market price. Fair trade organizations have
set buying prices but the price offered is not necessarily always the highest price
available for farmers. Those farmers that produce high-quality beans sometimes
feel that they can make more money on the conventional market. On the world
market prices fluctuate constantly so if the market is on a high, farmers may sell
their coffee on the global market to earn a higher price for their product. Farmers
who grow Arabica beans at high elevation have more bargaining power because
they have a more attractive product (Sick 2008:201). Conventional markets still
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provide famers with the ability to find buyers who will pay premium prices for
high quality Arabica beans (Sick 2008:204). Furthermore, when coffee prices rise
on the global market, other farmers may also want to take their chances on the
conventional market to receive higher prices. Even though the market has created
many of the problems that farmers have, they use the market as a mechanism to
earn higher prices for their coffee (Jaffee 2007:56). Yet despite global market
fluctuations, fair trade farmers are generally content to be part of fair trade
organizations and to have consistent, dependable prices all season.
Costa Rica has a relatively high standard of living, but the fair trade
organizations do not take this into account. The cost to produce fair trade organic
coffee is more expensive than producing coffee using conventional techniques.
Coffee farmers in Costa Rica receive the same prices for their products as farmers
in less developed countries where the people can live off of fewer U.S. dollars per
day. Living in Costa Rica, one of the most stable coffee producing countries, can
have an unanticipated disadvantage, in that the farmers are earning the same
wages but they do not go as far (Sick 2008:201). Fair trade organizations promise
to provide farmers with wages that cover the cost of organic production and
certification and a higher selling price than the conventional market, all to provide
a higher standard of living. These are ambitious goals that fair trade organizations
have not been fully able to live up to yet.
Intermediaries who deal with the coffee are said to decrease the price the
farmer receives and increase the price per cup for the consumer. Fair trade was
established to deal with that. In some instances fair trade organizations
themselves can be thought of as middle men. Farmers of Coopeagri Costa Rica,
have stopped selling to their Fair Trade Organizations and have began to sell
directly to the buyer, York University and Timothy’s World Coffee (Sick
2008:203). This is an impressive accomplishment for farmers with such direct
connections to consumers, but for the average coffee farmer this is not feasible
and fair trade remains the best way to sell coffee on the global market.
Beginning in 1989, but more severely from 1997 to 2004, prices of coffee
in the global market dropped dramatically making it extremely difficult for
farmers to survive based on wages earned from their crop (Jaffee 2007:37).
Coffee farmers sell their product in a highly volatile market; this leads to
competition, hostility and the need for some farmers to seek alternative markets
and in extreme cases alternative lifestyles. A farmer expressed his concerns about
the market by stating “Coffee prices have been so bad that we can no longer
support ourselves. I don’t want to divide my family by going away to the [United
States] to work. Maybe it is time to tear out my coffee and get dairy cattle like so
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many others are doing” (Sick 2008:196). Coffee farmers sometimes find it
necessary to convert their land to engage in a different economic niche like cattle
farming, a more profitable venture. Cattle farming may be more profitable when
the price of beef is high, but cattle farming can have devastating environmental
impacts: “The coffee production crisis in Central America is taking a toll on
environmental equilibrium, say experts, because the abandonment of thousands of
hectares of plantations reduces the process of carbon fixing and oxygen
production, while leading to increased soil erosion…” (Jaffee 2007:138). During
this time some farmers abandoned their plots, alternatively, they moved to the
cities to find employment or seek out a temporary form of employment. Others
cut costs by reducing investment, using family labor rather than hired help and
increasing food production on their land (Jaffee 2007:52). A coffee farmer in
Sarapiquí, a county of Heredia Province in Costa Rica, expressed his frustration
with the fair trade market when he stated “It [fair trade] is still the same: those
who really make money from our coffee are those who sell it cup by cup in the
coffee shops in the North. That is where the profit is. We don’t see it here.” (Sick
2008:202). Disheartened farmers in Sarapiquí are looking to the domestic coffee
market to meet their needs. They hope to sell their coffee in Costa Rica, give
coffee farm tours and open up coffee shops of their own (Sick 2008:202).
Although farmers express their grievances, having access to fair trade markets can
mean the difference between making enough money to support one’s family or
searching for alternative employment.
One major challenge to the success of the fair trade process is the
necessary certification. Fair trade certified cooperatives must cover the cost of
production as well as exportation of the product. As a result of these limitations,
one organization, Coocafé, keeps an extra $1.65 USD per quintal, a unit of
measurement in the metric system that is equal to one hundred kilograms, to cover
its operating costs (Sick 2008:200). Fair trade growers are forced to deal with the
often stringent demands of certification. Certification is crucial to ensure the
customer that the coffee being purchased has been grown according to social and
environmental standards. Certification is problematic because cooperatives must
pay for the certification of their farmers, leading to a high start-up cost and
maintenance fee (Sick 2008:200). Fair trade presents difficulties, as does the
certification needed to participate in it. Certification is based upon an initial
inspection of the farm followed by regular inspections there afterward (Jaffee
2007:148). Until very recently inspection was carried out directly by U.S. and
European representatives of certification companies. The representatives charged
rates that they would in their respective countries, which are considered high for
most small-scale farmers. International representatives were not available to
troubleshoot problems except during inspection, so small problems grew because
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of time lapses between inspections, distance, and language barriers. Some farmers
felt that the representatives lacked cultural sensitivity as well. Representatives
were not always sensitive to the plights, problems, or realities of the Costa Rican
coffee farmers (Jafee 2007:149).
The process of certification can be associated with certain fears. There is
always the danger that a farmers’ certification will be taken away because he
failed to meet requirements or because of incorrect paperwork. It can be very
costly to be re-certified and even more devastating if an entire cooperative is decertified. It shows the control that the certification process has on the lives of the
people. As fair trade coffee becomes more popular, fair trade organizations are
making the requirements for certification more rigorous, in order to maintain their
legitimacy amongst the consumers (Jaffee 2007:150).
In some cases it has become mandatory that all subsistence food being
grown on the property be organic (as well as the coffee). This can be costly for
the farmers to maintain the fertilizer requirements for organically grown food
stuff that is being raised to simply feed their families. Some of the food crops that
are grown by farmers are far more susceptible to insects, but the farmers may not
use any type of chemical on their crops because they would be breaking their
contract. In this way the farmer has lost some of his free agency and he has
entered into a conundrum of restrictions (Jaffee 2007:151).
It is important to note that local conditions undoubtedly play a role in the
farmers’ opinion of fair trade. Soil and altitude that affect coffee quality,
infrastructure, distance from market, available alternatives, and the size of the
local cooperatives affect the farmers’ success (Sick 2008:204). These factors that
farmers cannot control impact their lives, some farmers, simply through
geographic location and soil quality, become wealthy while others struggle to get
by. The location of a plot of land or the richness of the soil can help or hinder a
farmer but, as in any profession, creativity can lead a farmer to be more
successful. Innovation can help farmers to deal with a volatile market as well.
New techniques may be used for cutting costs and increasing profit. Many
farmers have installed wastewater purification systems and coffee-husk
composting systems. Coope Montes de Oro, a coffee farming cooperative in
northern Puntarenas province in Costa Rica, with the help of a U.S. solar
company, has created one of the first solar-powered coffee-drying factories (Sick
2008:201). The costs, risks and benefits involved in fair trade and conventional
practices affect the farmers’ outlook.
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To cope with these hardships Fair Trade International, the German based
organization that brings fair trade prices to a variety of products, has increased its
minimum buying prices. These changes went into effect as of April 1, 2011
(Pasquini 2011). Fair trade minimum prices have increased from USD 1.25 to per
pound for washed Arabica to USD 1.40. Fair trade premium prices (for high
elevation Arabica beans) have increased from USD 10 cents per pound to USD 20
cents per pound (this is in addition to the agreed upon fair trade minimum price
that the producer is already receiving). Prices for organically grown bean will
increase from USD 20 cents per pound to USD 30 cents per pound (this is in
addition to the agreed upon fair trade minimum price that the producers are
receiving). Fair trade buyers and producers negotiate a contract that sets a
minimum buying price for a pound of fair trade certified coffee. Farmers have the
opportunity to earn a higher price than the set minimum if they have premium
beans or organic certifications. Trading standards have also been revised to
encourage negotiations, clarify price fixing, and reduce speculation. These
changes create a stronger safety net for farmers and help cooperatives with prefinancing to purchase coffee from its members (Pasquini 2011).
Fair trade certification implies a social element of a fair price while
certified organic is just about the physical coffee. Growing organically implies a
social concern as well, a conscious choice of health for the farmer, his family, and
a concern for the world. The two often go hand in hand and are often used
synonymously. Buyers for non-organic fair trade coffee constrict and pressure the
market even further but are hard to find because it is simply more marketable for
fair trade organizations to buy organic coffee and market it as organic and fair
trade so that they can receive a higher price per cup of coffee (Jaffee 2007:148).
Certified organic coffee beans bring an extra 15 to 30 cents per pound. That price
is in addition to the fair trade minimum price (Jaffee 2007:56).
Much of the organic coffee produced in Costa Rica is sold to western
nations, in particular, countries in Europe. In Costa Rica the internationally
recognized certification systems are called Ecologica and the Central American
Institute for the Certification of Organic Products. These two domestic
organizations certify organic products for consumption in Costa Rica and abroad
(Willer, Yussefi-Menzler, Sorensen 2008:172,180). Costa Rica’s certification
system was recognized as equivalent to that of the European Union. Because of
this Costa Rica has gained a Third Country status in the European Union which
means that the coffee they grow does not need to be re-certified to enter the
market in Europe. (Willer, Yussefi-Menzler, Sorensen 2008:172).
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Organic Practices
Organic and sustainable practices allow farmers to apply their ancestral
knowledge about the land. Organic farmers draw upon familial knowledge of
farming because organic methods are similar to that of the farming methods used
in past generations. These methods are labor intensive, use the sun’s energy to dry
the coffee beans, grow coffee that is planted amongst other crops and use natural
solutions to problems. Fair trade connections allow farmers to simultaneously
have access to new information, technologies and techniques as well (Jaffee
2007:146). Information about the organic process, tips and tricks are often shared
among farmers. Workshops are held to train new members, as well as to
demonstrate new techniques to current members (Jaffee 2007:154). Through
Jaffee’s research (2007:155) he has found that conventional farmers have begun
using organic practices like composting, building live barriers and terracing
because they have seen how effective these methods have been for the organic
farmers. Conventional farmers are not receiving organic prices because they lack
the certifications required but the incorporation of organic practices is a way for
farmers to increase the sustainability of their practices and the productivity of
their land plots.
Organic processes allow soil to retain higher levels of organic matter and
high levels of nitrogen, allow for lower fossil fuel energy input, greater soil
moisture, and greater water conservation (Pimentel et al 2005). A reliance on
synthetic chemical fertilizers and pesticides has serious complications for both
people and the environment. Farmers typically use herbicides to control unwanted
weeds and as a result these herbicides may be found in streams and ground water.
Runoff of nitrogen fertilizers can create “dead zones” in the ocean, places where
living organisms cannot survive due to nutrient depletion. Conventional practices,
like herbicide use and intensive weeding can lead to soil erosion. Organic coffee
farming means no chemical fertilizers, pesticides, insecticides, or herbicides are
permitted. Organic coffee must be kept separate at all times and it must at no time
come into contact with any chemical products. This all must be recorded and
documented throughout the entire process (Jaffee 2007:147).
Organic coffee is shade-grown coffee which is important for protecting
biodiversity among species. Coffee grows best around the equator in tropical and
sub tropical regions, where biodiversity of plant and animal species is the greatest.
In developing countries deforestation is often high, so shaded coffee farms are
crucial areas of refuge for animals and plants. These niches often contain much of
the diversity that once resided in the original forest, including insect species, soil
dwelling organisms, reptiles, birds, and mammals (Jaffee 2007:135). Northerners
were first introduced to the importance of shade grown coffee farms when the
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number of migratory song birds began declining. The decline of song birds
coincides with the increased popularity of full-sun grown coffee. Scientists linked
the decrease in song bird species in part to the destruction of their habitats in the
southern hemisphere. It became apparent that shaded coffee farms had helped to
protect the species in the past, but with the popularization of full sun grown coffee
the birds’ homes were disappearing fast. In the 1990’s the Smithsonian Migratory
Bird Center has created a Bird Friendly Seal specifically to certify shade grown
coffee that protects birds. The seal of approval distinguishes coffee farms that
preserve the habitats of birds and essentially save important species by creating a
niche for them to live in on the shade-grown coffee farms. This certification is
separate from other organic or ecologically friendly certifications, having the
central goal of raising consumer awareness of the loss of birds’ habitats (Jaffee
2007:136-137).
There is not just one type of shade grown coffee but a gradient scale.
Jaffee (2007:139) explains the scale by ordering coffee production from most
shade and greatest biodiversity to the least. Rustic or mountain coffee involves
removing the understory of the natural forest and replacing it with coffee. This
method is most commonly used in remote, indigenous areas and yields low
production. The second is traditional polyculture, where farmers plant coffee
below native forest canopy while simultaneously planting other useful plants,
creating unaselvahumanizada, a humanized forest. Thirdly there is commercial
polyculture, where the natural forest cover is removed and trees are planted that
are specifically intended to provide shade to the coffee. Fourthly there is shade
monoculture, where trees of one species are planted for shade cover and
agrochemicals are often used. Lastly there is full sun technified coffee growing
(Jaffee 2007:139).
Originally the coffee plant required shade to be grown. In the 1970’s a
hybrid coffee plant was created that could handle full sun exposure and farmers
rapidly switched over, often because this change was government subsidized. The
U.S. Agency for International Development encouraged coffee growing countries
to use these “modern” coffee plants. This full sun coffee allows more plants to be
planted in a given area, increasing the number of plants three-fold per hectare
because it is not necessary to leave room for shade trees. Full sun coffee has
stripped shade cover from over 40 percent of coffee-growing areas in Latin
America. Further, this type of coffee requires the use of more pesticides and
fertilizers (Sick 2008:196). These new “full sun plantations” often lead to soil
erosion and water runoff, threatening the sustainability of the system. By 1990 in
Latin America almost half of the land used to grow coffee had been converted to
the full sun growing technique (Jaffee 2007:137).
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The widely used full sun technique for growing coffee has meant the use
of more chemicals on coffee crops as they are grown closer together and thus are
more susceptible to disease, henceforth creating the need for a viable organic
market. With such rapid and destructive changes occurring people have turned to
organically grown food to demonstrate their desires for environmentally
conscious practices. Today there are approximately 63,000 certified organic
growers of an array of products in Latin America with an average of two to four
hectares of land. In Latin America there are over 300 certified organic exporters,
mainly cooperative groups and farmer’s groups (Willer, Yussefi-Menzler,
Sorensen 2008:170). In 2000 in Costa Rica there were 8,974 hectares of certified
organic land in use. In 2006 there were 10,711 hectares, totaling .4% of the
agricultural land with 3,000 producers working that land (Willer, YussefiMenzler, Sorensen 2008:180, 233). In Costa Rica organic coffee farmers grow
other crops that they sell to the local market, a process they call ‘Organic
Integrated Farms.’ Similarly Costa Rican organic farmers find local markets and
supermarkets to sell their organic coffee. Specialized health food stores can cater
to informed individuals who are seeking out organic products (Willer, YussefiMenzler, Sorensen 2008:166). It is important to understand that organic coffee
farming became a feasible way to make a living only with the creation of fair
trade organizations to sell the organic coffee through.
Governmental Involvement
No country in Latin America provides subsidies or support for organic
farmers but they are often protected through laws. Some countries have
promotional programs but mostly the organic movement has grown of its own
accord. International Aid agencies from the Netherlands, Switzerland and
Germany often give aid to support organic practices. In Costa Rica in particular
there are funds for research, experimental projects and teaching about organic
practices (Willer, Yussefi-Menzler, Sorensen 2008:173).
In comparison to other countries in Latin America, the Costa Rican
government has played an active role in the lives of Costa Rican coffee farmers.
This activism has lead to increased rights of farmers and a better quality of life for
the farmers. On the official government website for the coffee sector (Instituto del
Café de Costa Rica, ICAFE) the Costa Rican government sees the importance of
coffee “Since the 18th century through our history, coffee has been a fundamental
pillar of Costa Rican society and the motor of our national economic
development. Because of this [coffee] is called the golden grain” (“Instituto del
Café,” 2011). The Costa Rican government believes that trade in coffee is
positive because it increases foreign exchange. It works hard to support farmers’
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rights, cooperatives and advancement in education, health care and infrastructure.
Today tourism is the largest and most important part of the Costa Rican economy
but coffee is the largest crop and it is the source of income for some seventy-eight
thousand small-scale highland farmers who produce 2.5 million quintals per year
(Sick 2008:195).
Oscar Arias, the former president of Costa Rica notes “how vulnerable
coffee farming makes his country because we [Costa Rica] must rely on the
export of raw material. We can never be sure of prices because they are fixed by
the international market” (Valenti 1999). The Costa Rican government has
implemented laws to regulate, control, and protect coffee farming and the farmers
who participate because coffee is the backbone of the economy. Costa Rica is the
only coffee-producing country that has a law in place that dictates that only
Arabica coffee is to be grown (Arabica coffee typically commands a higher price
on the market). The government also implemented a law that only red berries may
be picked. Farmers harvest their coffee crop in several waves, leaving the
unripened berries on the plant to ripen, giving Costa Rica the greatest yield per
acre in the world. Through government regulations like these the small country of
Costa Rica can be competitive and successful on the global market. (Valenti
1999).
Case Studies
Through the results of my own fieldwork in the fall of 2010, I can
conclude that El Toledo, an organic coffee farm that is part of a larger cooperative
of families in Atenas, Costa Rica has succeeded because of the local
government’s support. El Toledo, owned by the Calderon Vargas’ Family, has the
government on its side, both parties believe that organic practices are better for
the people and the environment. In the past the family practiced conventional
farming but they decided to turn to organic practices for a number of different
reasons. Herardo Vargas, the head of the house was suffering from health
problems due to the pesticides, insecticides, and herbicides that he had been
exposed to. The family became increasingly concerned about not only their health
but the land, which they worked and lived on. The family’s coffee plant had a
fungus that was out of control and slowly taking over and killing all the plants.
They were spending more money on herbicides that did not even appear to be
working. The Calderon Vargas’ have two sons and they began to think of the
future of their children. They expressed their interest in organic farming to friends
and neighbors and created a small group of families dedicated to the cause. The
dire economic state that the global coffee market was in, made it worth the risk to
turn towards organics and to look to enter into an alternative market (the fair trade
market).
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It took the cooperative three years to become certified organic. They are
certified under Ecologica, the globally recognized certification from Costa Rica.
With this certification they sell the dried, unroasted beans to companies in
Germany, Japan and the United States. The group shared costs for the equipment
necessary to undertake this operation. The Calderon Vargas family de-shells the
coffee, dries it and stores it for the other members of the cooperative. Once the
coffee is dried it must be maintained at 11% humidity until it is sold. It has to be
kept in a secure shed until it is shipped abroad at the end of the harvest season.
For the Calderon Vargas family switching to organic practices was a
lifestyle change. Since they have switched to organic production, they spread
eighty bags of fertilizer on their crops, spreading so much fertilizer on the side of
a mountain requires substantially more man power, than the family previously had
to employ. They began to hire help to fertilize every season. Members of the
cooperative, like many others across Costa Rica hire Nicaraguans as seasonal
wage laborers. Nicaraguans can make approximately four U.S. dollars for
working eight hours a day in Nicaragua. They can make approximately ten U.S.
dollars for working six hours a day in Costa Rica.
The Calderon Vargas family, staying true to their commitment to
sustainability uses all organic techniques. The family invested in a machine from
Colombia to de-shell the coffee cherry from the bean that uses a very minimal
amount of water. In the organic coffee process much of the honey remains. This
means that the bean takes longer to dry out but also that the coffee maintains a
subtle flavor and a natural hint of sweetness. The remnants of the coffee cherry
are put back on the field as fertilizer, the organic process requires eighty bags of
fertilizer to be dumped on their crops every season. The coffee is dried via solar
energy, which takes at least a week, if not more, dependent upon cloud cover, rain
and hours of direct sunlight. Gathered from personal experiences, I can attest that
the coffee must be rotated by hand using a wooden rake every hour, to keep it
drying evenly and as quickly as possible on all sides. The family became
unofficial meteorologists, always predicting rainfall because the coffee needs to
be covered immediately by plastic tarps or tin sheet at the first sight of rain. The
coffee is also covered every night to prevent dampness. For the family, turning to
organic processes is more expensive and timely, the family does not always see
the rewards of switching to organically grown coffee in the form of significant
financial gain. However the family does feel morally satisfied, they are living in a
healthier way and through the use of techniques that impact the earth less, they
are creating a better future for everyone. Due to the changes in farming practices
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that the Calderon Vargas family has made, they are living their lives as globally
conscious citizens.
Conventional and organic methods differ substantially. After switching to
organic methods the members of the cooperative produce less coffee, but it is
more sustainable coffee of higher quality. Most often conventional coffee farmers
grow the full-sun coffee, which allows for a greater yield of coffee per acre.
Conventional techniques require as little as ten bags of fertilizer and a substantial
amount of chemicals. Conventional methods for coffee production require huge
amounts of water to de-shell the coffee cherry from the bean and to wash the
natural honey away. The process requires large amounts of water and often times
the contaminated, highly acidic water runs unfiltered into streams. Conventional
methods entail huge cylindrical dryers, heated using wood, in order to dry
thecoffee. This process takes no more than a couple of hours, so more coffee can
be dried faster, but with a greater carbon footprint, at the cost of the environment
and the natural resources.
Shade grown coffee is an important aspect of the organic process. In the
Vargas’ seven hectare farm there are 100 different kinds of trees. The land is
considered 80% forested, which means that the coffee is growing in and amongst
many different trees. The “forest floor” is covered with grass and weeds to
prevent runoff. The family and the other cooperative members have worked
closely with the local university to create balance and diversity in the finca. They
have planted fruit trees, bananas, plantains, limes, and many other foods that they
consume. Planting other crops besides coffee helps to oxygenate the roots of the
coffee plants. The diverse variety of trees causes nitrogen fixation, nutrient
uptake from the roots and promotes growth through diazotrophs (bacteria) and
other microorganisms in the soil. These organisms help the plants to process
nitrogen and be healthy. After changing the mini ecosystem of the farm the
fungus that was killing the plants was under control within five years.
Gabriel, the son of the family, intends to teach others about his passion for
organic farming. He works as a certified tour guide during the tourist season. He
is interested in bringing tourism to the coffee farm. He bought a toastadora, a
machine to toast his own coffee. He sells the families’ organic coffee at the local
market every week and to a hotel that he previously worked for. He is in the
process of re-modeling to create a soda,a Costa Rican slang word for a small
restaurant. He wants to bring tourists to the farm, give them a tour and sell them
traditional food and coffee. Gabriel needs to be innovative in order to make up
for the void that is created from the market, a void that even the fair trade market
cannot patch. Even with the families’ organically grown coffee being sold on the
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fair trade market, the family still must engage in other forms of employment. The
mother of the house bakes bread to be sold at the local market every week, the
father works as a mechanic for his neighbors and Gabriel, the son, is working to
create a tourist attraction out of the coffee farm, in order to supplement the
income earned from the coffee grown.
The cooperative El Dos in Tilarán, also called Coopeldos is located in
northwest Costa Rica (Luetchford 2008:32). The government helped interested
farmers with the creation of the cooperative through financial incentives and
support. The farmers received a loan of 100,000 colones from the Cooperative
Department at the National Bank of Costa Rica to purchase the equipment to
process the coffee. With that the El Dos coffee cooperative was founded in May
of 1971 (Luetchford 2008:34,35). Coopeldos has two certifications for its coffee,
one to distinguish it as quality coffee and the other to ensure the consumers that it
was grown and processed in an environmentally friendly way (Luetchford
2008:39). These certifications are important to show the legitimacy of the
organizations but they have created rigorous standards that the farmers must live
up to in order to remain apart of the cooperative.
Farmers initially had an interest in organic practices because “…farmers
are aware of the effects of their actions, concerned about sustainability and, given
incentives and possibilities for gaining a livelihood, are able and willing to alter
practices” (Luetchford 2008:88). The motto of the cooperative,
“sembramosprogreso”, (“we sow progress”) demonstrates the cooperatives’
investment in the earth and agriculture as an avenue to progress. The cooperative
system provides equality and participation for its members (Luetchford 2008:36).
Money to expand comes from loans, grants and funds from their involvement in
fair trade (Luetchford 2008:38). The cooperative is very active within the
community, giving scholarships to students, making donations to elderly people’s
homes, as well as other development organizations.
The cooperative has addressed environmental problems through
innovative solutions. To address energy usage, the cooperative installed solar
panels on the roof of the building. To combat problems of water contamination,
they treated the used water and lessened the amount of water needed for coffee
production.To create more biodiversity, they established niches by the river as a
safe haven for wildlife. The cooperative also grows saplings and sells them to its
members so that they can restore land. Trees are very effective in creating
windbreaks to protect the delicate coffee cherries. Trees on coffee farms are
increasing in importance as the market for shade grown coffee increases
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(Luetchford 2008:40). The cooperative toes the line between efficiency and
providing well-being for its cooperative members (Luetchford 2008:46).
Coopeldos is a large cooperative, with thirty full time employees. Because
of its size it needs administrators to run its affairs. With the implementation of
administrators “middle men” are created, and the unfair advantages gained by
middle men are seen even in an organization as small as a cooperative. One
farmer expressed his opinion by referring to the cooperative as a mother. He
stated, “we want mama cooperativato look after us, to nourish and feed us, we
want her to be a good mother, but she is not. She keeps us lean and hungry while
she grows fat, and we only manage to keep our heads above water” (Luetchford
2008:139). Luetchford (2008:140) describes conversations that he had with
farmers who refer to the clerical work being done in the office of Coopeldos as
vago, lazy. The farmers describe people who engage in physical labor, or
agricultural work as valiente, strong and muytrabajadora, hard-working.
Although there exists a discrepancy between the two types of work it is
recognized that they need each other in order to function. Coffee farmers in
Tilarán need the cooperative to sell their product on the market. This dependency
exists at every level of the market structure and causes grievances between
individuals and organizations.
The Effect on the Family and the Community
Coffee farming creates jobs for local families and individuals and migrant
workers. “A major benefit associated with coffee farming, and one often referred
to by growers, is the employment it generates. As a labor-intensive industry with
a high rate of return per hectare it is suited to small landowners with large
families, and is said to encourage equity in the social distribution of wealth and
resources” (Luetchford 2008:71). The Alvadardo family of the cooperative is an
example of a typical family in the region. The woman of the house and her
daughter run the domestic sphere. They also help pick the coffee during
harvesting season. The man of the house, in his seventies, spends his time
leisurely and oversees the coffee processing. The three sons work on their own
coffee plots and do other activities to supplement their incomes’, one owns a
mechanic shop (Luetchford 2008:54). Both men and women work to pick the
coffee. In El Dos 44% of women pick coffee (Luetchford 2008:75). During
picking season Costa Rican laborers in the Tilarán Highlands cannot keep up with
the amount of ripe coffee that needs to be picked, so they turn to Nicaraguan wage
laborers. Coffee farming is laborious and requires many hands to make it
successful but does not generate enough income so families like the Alvadardo
family must seek out additional employment (Luetchford 2008:85).
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According to Luetchford’s (2008:107) ethnographic work, he finds that
the culture of the rural Costa Rican plays a role in the behavior of coffee farmers.
The notion that God has provided land as a way for humans to create sustenance
for themselves is why they are so conscientious of the sustainability of their
practices. The Catholic patriarchal idea of an autonomous household, where the
man is supporting the family is played out in the lives of the coffee farmers. In El
Dos, and Costa Rica in general, identity is shaped around the idea of the family
farm. Though these ideals certainly exist, the reality is that there are landless
individuals, single parents, ‘free unions’ between couples, separations and conflict
(Luetchford 2008:107).
The belief in God plays a large role in everyday life in Costa Rica and
explains why family farms became the backbone of the Costa Rican economy
after independence from Spain and why they remain an important part of the
small country’s economy. The farmers recognize that they cannot control nature
by constantly using the expression si Dios quiere, God willing. Despite this the
farmers still do everything in their power to do what they can. If periods of high
rainfall occur near the time of harvest many ripe coffee cherries will fall off the
plant, often times farmers and their families are on their hands and knees
salvaging what they can (Luetchford 2008:87, 90). Local knowledge of the
environment is also used to optimize efficiency. For example pruning should be
done under a waning moon because it is said to encourage better growth of new
shoots. In order for trees ‘to take strength’ they should be planted in the days after
a full moon (Luetchford 2008:101). Organic farmers of the El Dos region used
manure mixtures to fertilize the land. Traditional knowledge of the medicinal
properties of plants grown on the farm are used in the household to keep family
members healthy as well (Luetchford 2008:102). Through traditional knowledge,
faith, government intervention, collaborations through the cooperative, and
determination the people of El Dos are working to make a living off of fair trade
coffee farming.
These two case studies, El Toledo and Coopeldos illustrate that despite the
benefits that the involvement of fair trade obviously has, there are still some
problems. Certifications can be burdensome, stressful, and demanding but
provides a necessary link between the farmers and consumer’s trust in fair trade
and organic products. Organic production can be costly with the amount of
fertilizer required, organic equipment and the time commitment that growing
organically entails. The farmers turn to local markets to sell off surplus crops and
even to other occupations to supplement coffee farming.
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Conclusions
By breaking down the elements that come into play in the market, such as
certifications, competition, falling prices, alternative buyers and day to day
hardships, one can begin to understand the difficulties that Costa Rican coffee
farmers have in today’s globalized economy. The manager of Coopeldos said “if
we can look one another in the eyes, we can understand each other’s needs”
(Luetchford 2008:185). Hopefully unconventional markets, like the Fair Trade
market can continue to create a livelihood for coffee farmers with fair trade
certifications in the future. With the establishment of fair trade markets perhaps
the world will begin to see that conventional practices and conventional markets
are neither serving the environment nor the farmers. Improvements need to be
made to fair trade markets to provide greater access to the markets and higher
selling prices for the coffee. As they stand today fair trade market alternatives,
provide fairer selling prices and a social concern for the people growing the
coffee. Fair trade organizations are working to mend injustices found within their
organizations and to improve the lives of individual farmers. If these
organizations can continue on the path that they are on, providing for small-scale
farmers, then they are doing their jobs and making a difference.
Fair trade is important for the success of small-scale farmers, for the
environment and for the consumer, as all three entities benefit from it. Fair trade
organizations provide a consistent income for farmers that reflect the cost of
production of the coffee beans, allowing them to participate in a reasonable way
in the world’s market as content and productive global citizens doing their part
and making a contribution on a global scale. Fair trade organizations work to
correct the abuses that the capitalist system places on the farmers but fair trade is
not the solution to the freely traded volatile capitalistic market, in fact it exists
within that market, making it a part of the market, meaning that some of the
inconsistencies and problems found in the global market remain problematic
within the fair trade market. Fair trade is situated within the capitalist framework,
it may be difficult to find a long term solution if individuals are only looking for
ways to resolve the problem within the current capitalist system. In order to really
find a solution to the problems of global inequality, individuals may need to look
to a new economic or societal organizational system. Until a new system is
conceived and recognized by the masses, fair trade helps to alleviate inequalities,
by first recognizing that they exist and providing producers with fair prices.
According to Marx, division of labor and the capitalist market have created
disadvantages for farmers, fair trade is the first step in correcting these injustices.
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